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The Great Swindle – Part Four

May 17, 2013 — newcommunityschool

WHOSE BALLPARK IS IT?

The Monongalia County “Ballpark TIF” is not supposed to be a charity for WVU. The public is funding the baseball stadium. WVU is not. So the public should own the baseball stadium. WVU should not.

The public is funding the multi-use baseball stadium with local tax dollars to the tune of $16.2 million, plus building an adjacent interstate highway interchange with local tax dollars costing $28 million, plus providing additional millions in near vicinity infrastructure.

WVU is purchasing a 7 acre site for the ballpark from private developers for $2.1 million. Compare WVU’s $2.1 million to the local taxpayers’ $16.2 million plus $28 million plus untold other TIF plan millions. Yet WVU claims ownership of the stadium via WVU associate general counsel Rossi Wiles:

“By law, whoever owns the ground, pretty much [the baseball stadium] would go…to that entity, which, we do believe to protect the university’s interest and to play our baseball games, it really should come to the university.”

Wealthy entities, like WVU athletics, can afford to buy and build their own ball fields and stadiums. The public’s tax dollars should not be used buy a new baseball stadium for WVU athletics, nor for anyone else. After all, the owners are going to make the bulk of the money off the stadium facilities, and the owners will get the highest priority use of the stadium facilities, so they should pay for it. If WVU would like to set up a payment plan to repay Monongalia County (and the state), then I’m sure the Commissioners would be glad to help make such arrangements.

We should’ve seen it coming – WVU Athletic Director Oliver Luck pushing tens of millions of public dollars into the pockets of the wealthy through ballfields in Texas and West Virginia.

Since June 2010, Oliver Luck has been the Athletic Director at West Virginia University. A former WVU quarterback, NFL quarterback for the Houston Oilers, and a West Virginia Republican (failed) congressional candidate, Luck returned to WVU after working as head of the Houston Dynamo soccer team and head of the City of Houston and Harris County Sports Authorities, where he helped to secure public financing for the new Houston Dynamo soccer stadium.

The City of Houston and Harris County were convinced by Oliver Luck and his colleagues – it took five years – to put $35 million dollars (the public’s tax dollars) into buying the site for a new Dynamo soccer stadium and for making infrastructure improvements. The Dynamo put $60 million into the stadium – much of which was then immediately covered by stadium naming rights (sold to a bank) and other multi-million dollar deals made by the Dynamo, while the city of Houston and Harris County were completely iced out of most or any such deals. In other words, the Dynamo owners could swiftly make back their investment in the stadium facility, whereas the city/county taxpayers’ investment was not necessarily recoverable. Similarly here in Monongalia County – why should WVU get away with not paying back to the local taxpayers the millions it plans to take from them to build a stadium to be owned, controlled, and used by WVU? Recall, WVU is backed by its own massive income, including by its $1 billion annual budget and additionally by the WVU Foundation, Inc, which currently holds $1.2 billion in assets.

It’s a sick and abusive relationship for local taxpayers in Monongalia County, where nearly 22 percent of the population lives below the poverty line, to be subsidizing a ballfield costing tens of millions of dollars for the gold stockpilers behind the WVU athletic department, which – oh by the way – pays the football coach Holgorsen $2.5 million per year, and basketball coach Huggins $3 million per year, and athletic direct Luck $.7 million per year, for a combined $6.2 million paid each and every year to a mere three employees at WVU athletics. WVU should get out of the public’s pockets and pay for the damned ballfield itself.

The argument in these TIF type deals is that taxpayer funded TIF projects pay for themselves ultimately by increasing surrounding property values and/or commercial sales therefore increasing municipal (or state) funding through increased property and/or increased sales tax. But as many independent analysts have pointed out in the case of sports deals, most or all of the sports development would happen anyway, somewhere. The upshot is something like $2 billion per year in the US are given away by the taxpaying public to fill the wallets of wealthy sports owning individuals or entities, as Neil deMause and Joanna Cagan (and many other researchers) document in the book Field of Schemes and elsewhere.

Now throw WVU athletic director Oliver Luck into the Monongalia County mix. He and the operations under his direction have a history of acting secretly and unethically and in ways that are explicitly forbidden, for example, as determined in 1990 by the West Virginia Ethics Commission, and as determined (though soft-balled) in recent months by the West Virginia Attorney General regarding the WVU sports media rights. Moreover, Luck is deeply experienced and makes up to $700,000 per year and is engaging in negotiations with Monongalia County Commissioners who are relatively inexperienced in these matters and who make less than $37,000 per year. Luck has thoroughly taken advantage of the public regarding this “Baseball TIF,” and he is now persistently trying to finalize an especially odious, raw deal toward the county. No wonder he was defeated in his Republican congressional bid to represent this area in the US Congress. Moreover again, Luck’s previous organizations that he headed and oversaw, the Houston Dynamo and the Harris County-Houston Sports Authority (HCHSA), have lied brazenly and publicly, and otherwise misrepresented and distorted the financial reality of ballpark financing, throughout the process of securing city and county financing for the new Dynamo soccer stadium in Houston. For example:

“The total project is expected to cost $95 million, with none of the money coming directly from taxpayers.” -HCHSA and Houston Dynamo, joint statement

In reality: $35 million in city/county funds, most or all of which were tax funds, went to purchase the site and provide infrastructure for the site and stadium. True, each individual taxpayer did not “directly” hand the Dynamo owners the money, face-to-face, fingertip-to-fingertip, but the tax money somehow found its way there, and swiftly. Amazing how that happens…”indirectly.” The Houston newspaper articles are funny to read. The articles report on the tax dollars, how many and what kind of city and county tax dollars are involved, then without comment report officials’ and executives’ statements that no tax dollars are involved:

$95M multi-use venue won’t use public funds, team and city officials say

Allison Wollam, Reporter

After nearly five years of intense negotiations, the Houston Dynamo are gearing up to break ground on a long-awaited East End stadium at the end of this month.

The only remaining minor hurdle is approval of the newly created Tax Increment Reinvestment Zone 15, a public financing tool that encourages public-private partnerships and is based on increased tax revenue generated by the development of the stadium.

Harris County Commissioners Court and Houston City Council will consider the measure it next week. If all goes well, the Major League Soccer team will break ground on the new stadium Jan. 29, marking the construction of the fourth professional team venue in Houston since Minute Maid Park opened as Enron Field in 2000.

“We’re in the home stretch, and we’re focused and determined to get this deal wrapped up,” said Chris Canetti, president of the Dynamo.

The total project is expected to cost $95 million, and the team says none of the money will come from taxpayers. The city acquired the land for $15 million in early 2008 and is leasing it to the Dynamo. Harris County-Houston Sports Authority is the long-term landlord.

The Dynamo will contribute $60 million to the construction of the stadium, located just east of U.S. 59 on a12-acre site about four blocks from Minute Maid Park. The remaining $20 million will come evenly from the city and county through a tax increment reinvestment zone, or TIRZ.

More propaganda:

“It is the first sports venue that we’re aware of that doesn’t have any public money involved, and we think this is a phenomenal deal for the taxpayers of this community, because it’s not costing the taxpayers anything, and it’s going to be a terrific facility…” -Kenny Friedman, head of HCHSA

Entire college courses could be taught on the rhetoric of executives and officials lying about publicly funded sports stadiums.

FREE LUNCH! (plate cost: $20)

There are lies and then there are violations. WVU Athletic Director Oliver Luck has by now a track record in West Virginia of contravening state and university rules and regulations, polices, and even laws, as prominently claimed recently in the Dominion Post – state documented violations and transgressions here in West Virginia, a place where he has not actually even spent much time yet professionally.

In the case of the ballpark TIF, as far as is known, Luck merely asked (surely in argument form) and is still asking/arguing for the state/county handout, which was generally granted by the Monongalia County Commissioners and by the WV state legislature and the Governor. However, huge financial and practical details remain to be worked out – including the entire lease agreement determining use, control, and ultimate ownership of the baseball stadium that is expected to host multiple university baseball squads, a minor league baseball squad, and diverse other events and activities, including concerts. But WVU wants to own the ballpark lock, stock, and barrel.

Luck’s legislative point man for getting the TIF bill sponsored and passed in the WV legislature, Senator Bob Beach would have people believe in Monongalia County a version of the Houston Dynamo lie that there is no loss of county revenues to public needs. There is a huge loss, and the county’s general loss is the TIF district’s huge gain, tens of millions of tax dollars locked for the next 30 years into a district that is both commercially thriving and relatively unpopulated, locked away from residential areas of the county and all other county areas and needs, much of which are rundown and pressing. Thus private and super wealthy interests divert public funds for their own gains. A nifty way for private power and wealth to reduce and take from public power and capacity.

By all rights, if WVU wins the ballpark facility, Monongalia County ought to take tens of millions of TIF funds and build a splendid county headquarters next to the ballpark, put in a big old county campus and luxurious spread, call it the TIF Infrastructure Oversight Development Authority! At least, then, in 30 years at the end of the TIF, the county should have some valuable land and facilities, instead of nothing, not even the ballpark it paid for.

WVU will be sitting on that pretty piece of land, with that valuable facility, not paying taxes, leasing the stadium variously, and selling the naming rights for maybe millions over the years, using and controlling a 9,000 seat ballpark built with over $16 million in public funds, and augmented by tens of millions of dollars worth of supporting infrastructure, including an adjacent $28 million interstate highway interchange.

Oliver Luck may not be paid to be altruistic – interestingly enough given WVU’s socially benevolent Mission Statement – but he isn’t paid to dissemble, and he isn’t paid to violate and transgress state and university laws and policies. Given his ever growing track record, he should be regarded dubiously. And he should be stopped from expropriating ownership and control of the TIF district stadium from the county (and state) to WVU athletics. It’s not remotely clear that what WVU Director Luck is attempting to secure from the county is even legal, not least given the statement made by WVU’s attorney in these matters, Rossi Wiles:

“By law, whoever owns the ground, pretty much [the baseball stadium] would go…to that entity, which, we do believe to protect the university’s interest and to play our baseball games, it really should come to the university.”

“By law…pretty much”? What again is the legal standing and definition of “pretty much”?

The university would pay a private developer $2.1 million to purchase 7 acres upon which $16.2 million in county and state TIF tax monies would be spent to construct the stadium, and more is spent to provide infrastructure, and the 7 acre property leaves the county tax base (because the county, state, and WVU are tax exempt). But the stadium “pretty much would go” to the owners of the seven acres who are tax exempt and who put in the very smallest fraction of the overall cost of “the project”?

Hmm. Why might one “pretty much” think that’s not quite how the law can, must, or should be interpreted? There are all sorts of lease deals where building owners do not own the land beneath the buildings, as WVU counsel Rossi “pretty much” Wiles well knows.

In fact, “pretty much” nothing happens in regard to any TIF lease agreement, as yet to be written, until the County Commissioners agree to it. Even if the county agrees to give away the stadium to WVU, a lawsuit could block the deal. And a successful lawsuit would show Oliver Luck to once again be grabbing in violation and gabbing in transgression.

Other than a lawsuit, at this point perhaps only the Monongalia County Commission can salvage something, maybe a lot, in the ongoing lease and ownership talks, in what would otherwise be a wholesale theft of county (and state) funds by WVU athletics.